Deutsche Bank defiance prompts rare unity among Merkel centrists, German fringe

Bloomberg

Deutsche Bank AG and Commerzbank AG’s merger talks have prompted rare unity across Germany’s fractious political spectrum: a collective thumbs down.
Lawmakers from Chancellor Angela Merkel’s Christian Democratic-led bloc to the anti-capitalist Left party and far-right AfD are laying into the plans. With the Social Democratic colleagues of Finance Minister Olaf Scholz also questioning the deal, the project’s main benefactor — along with his deputy Joerg Kukies — looks increasingly isolated.
“I haven’t spoken to a single lawmaker or anybody beyond Kukies and Scholz who thinks this is a good idea,” Olav Gutting, a lawmaker for Merkel’s CDU party who sits on the finance committee of the lower house of parliament, said in an interview. “The skepticism is huge.”
While Bundestag politicians have little scope to halt a merger directly, parliamentary headwinds spell trouble for the project and increase the political price that Scholz and his party may ultimately pay for their support. German taxpayers are on the hook through the government’s 15 percent stake in Commerzbank and a combination would need to clear a variety of regulatory hurdles to go ahead.
There’s also the possibility that another bank may swoop in. The Financial Times reported that Italy’s UniCredit SpA is readying a rival bid for Commerzbank in case the Deutsche Bank talks collapse.
Gutting offered a litany of reasons why the German lenders shouldn’t combine, including the time-consuming process of setting up a functioning business, which could delay much-needed restructuring. Meanwhile, lawmakers from the Social Democrats, Merkel’s coalition partner, are concerned about thousands of potential lost jobs.
“I have serious doubts,” Ingrid Arndt-Brauer, a Social Democratic lawmaker on the Bundestag’s finance committee, said in an interview. “The SPD is mostly concerned about the closure of branches and job cuts. This is what we will focus on in the evaluation of the merger.”
The resistance from coalition lawmakers creates a broad front opposing the deal. The Left party called a debate on the merger plans days after talks were announced, lambasting the plans. “You don’t get an eagle out of two sick turkeys,” the Left’s Fabio De Masi told Bundestag lawmakers on March 20. The environmental Greens have also voiced criticism, while Peter Boehringer, chairman of the Bundestag budget committee from the AfD, or Alternative for Germany, called it “pure state intervention.”